The homes of Beit Safafa are visible from Givat Hamatos, which the Israeli government hopes to turn into a neighborhood for over 2,000 families. / Michele Chabin for USA TODAY

by Michele Chabin, Special for USA TODAY

by Michele Chabin, Special for USA TODAY

JERUSALEM â?? Almost every item for sale in Talal Salman's market has Hebrew lettering, even though the store is in Beit Safafa, an Arab community in Jerusalem.

Signs here are in Hebrew and Arabic, and its buildings of white stone and roads snarled with traffic make it largely indistinguishable from the Jewish communities in Israel's capital.

"I have a lot of Jewish customers," said Salman, an Arab father of three who speaks fluent Hebrew like most of the 7,500 residents of Beit Safafa.

Such co-existence appears unlikely just a few miles to the east, where a Jewish city established 35 years ago in the Judean desert is being blamed for ruining any chance of peace between Palestinians and Israelis.

Ma'aleh Adumim was settled by Israelis on land that belongs to no sovereign nation. Four miles east of the Israeli capital of Jerusalem, it is in the narrow middle of territory between Jordan and Israel in the heart of the West Bank, a territory that 2.5 million Palestinian residents envision as a future state for themselves.

Some Palestinians say a decision by Israel to build 3,000 apartments on a barren, hilly 4.6-square-mile stretch that links Ma'aleh Adumim to Jerusalem will cut their hoped-for nation in half at the middle.

Others see the construction plan as another example that Israel is unfairly picking off land the Palestinians hoped would be theirs. Next to Salman's community of Beit Safafa, Israel is considering plans to build a largely Jewish neighborhood called Givat Hamatos that would be between Beit Safafa and the West Bank.

"Most people believe that even in the best scenario of a two-state outcome, a Palestinian state in the West Bank would still be in some form of Israeli occupation," said Yousef Munayyer, executive director of the Palestine Center in Washington.

But Israel's government says it is the Palestinians that are being unreasonable. Israel says the Palestinians have always known that strip of land labeled E1 on maps will be made part of Israel once borders for the two states are negotiated. And Israel has made clear that none of Jerusalem, the Jewish holy city, will be given away.

The Palestinians only have to end their refusal to sit down and negotiate with Israel over borders if they want their own country.

"Israel wants a two-state solution, but it can only be achieved through direct negotiations," Prime Minister Benjamin Netanyahu said recently.

The future of Israeli settlements has been a major campaign issue in the months leading up to Israel's national election Tuesday. The campaign has been all the more controversial due to the emergence of a new right-wing party, Bayit Yehudi, which supports the annexation of large portions of the West Bank for Jewish settlements.

That's putting pressure on Prime Minister Benjamin Netanyahu, whose traditional supporters appear to be attracted to Bayit Yehudi's leader, Naftali Bennett, a former top aide to Netanyahu and elite army soldier whose parents are American immigrants to Israel.

To compete with Bayit Yehudi, Netanyahu "has had to make very strong statements on settlements," said David Newman, a political scientist at Ben-Gurion University. "He's already seen as fairly intransigent by many people on the settlement front, but in the last few weeks his Likud Party has (approved) more settlements because of the approaching election."

A turf war as old as dirt

The origins of the settlement issue go back decades of wars, occupations and empires, and Israel and the Arab Palestinians continue to struggle with the matter of what should belong to whom.

The latest dispute arose last month when the Palestinian Authority, which governs the West Bank, asked for and received recognition as a non-member state from the United Nations. The move violated an agreement with Israel that the Palestinian representatives would first negotiate a treaty with Israel.

Palestinians say settlement activity is a violation of past agreements but Israel says no agreements prohibit occupation of disputed land in the absence of a peace treaty.

Netanyahu retaliated for the U.N. vote by announcing building plans for E1 rather than wait to discuss it in negotiations, and it was he, not the Palestinians, who was condemned by Arab and Western nations alike for acting before negotiating.

Hanan Ashrawi, a member of the Palestinian legislative council, told USA TODAY that the move would "bisect the West Bank" and make it impossible for the Palestinians to have a unified state.

The problem "isn't just E1, it's the whole settlement process," she said. "It's stealing the Palestinian people's lands and preventing the viability and contiguity of a Palestinian state."

The district of Abu Dis illustrates the Palestinians' complaint.

Salah Mohammed is a minivan driver in this small Palestinian town in the West Bank on the eastern outskirt of Jerusalem. Several times a day he takes passengers for the 10-mile ride from here to Ramallah, the administrative and commercial hub of the fledgling semi-state of Palestine in the West Bank.

Abu Dis is controlled jointly by Israel and the Palestinians, an arrangement meant to satisfy Israel's security concerns until a pact over the town's future is finalized in negotiations. Traffic and the Israeli roadblocks to check for terrorist movements turn the trip into a 40-minute drive.

"It could take a whole lot longer, we just don't know," Mohammed said of the prospect of the new apartments going up in E1, which is just to the north of Abu Dis.

Israelis say the Palestinians are exaggerating the effect of a small land claim that has always been known to them in previous talks. Connecting the 40,000 Jews in Ma'aleh Adumim to Israel proper will not cut the West Bank in two, say Israelis. Rather, it will merely make the West Bank as narrow at the waist that Israel is at its waist.

"It's simply untrue," said Efraim Inbar, a political scientist at the Begin-Sadat Center at Bar-Ilan University. "Look at the map, and you can see they can build a road and connect Ramallah with Bethlehem."

Foreign hands shaped dispute

The origins of the land dispute are in the defeat of the Ottomans, the Turkish empire that ruled all of Arabia and Egypt for four centuries until conquered in World War I.

The victorious powers of France, Britain and the United States cut up the empire into separate Arab kingdoms, creating new nations such as Iraq and Syria. But the land surrounded by Lebanon, Egypt and Saudi Arabia, home to Jews and Arabs, presented a problem.

The Jews known as Zionists pressed the Western powers to make the remaining land a national state for the stateless Jewish people. The British government, which controlled the region, agreed.

In 1922, the British divided the region along the Jordan River -- land to the east was named TransJordan, land to the west and to the Mediterranean was called Palestine. The British eventually handed TransJordan to an Arab monarchy but maintained control of Palestine.

In was not until after World War II, during which 6 million Jews were murdered in the Holocaust, that the world acted on the Jewish homeland. The United Nations approved the creation of Israel in two separate pieces. The rest of the land, including the West Bank, was for the Arabs. Jerusalem was designated an international city belonging to neither side.

Although the Jews agreed to the plan, the Arabs did not. In 1948, the armies of TransJordan, Iraq, Syria, Lebanon and Egypt attacked. Israel beat them back and won control of land that connected its two separate pieces along the Mediterranean coast.

TransJordan, soon to be renamed Jordan, seized the West Bank and the eastern half of Jerusalem as its own, and destroyed Jewish homes that had existed for centuries. Israel stopped TransJordan from taking the western half of the city.

Things remained that way until 1967 when Egypt, Syria and Jordan aimed again to destroy the Jewish state. Israel went on the offensive and pushed the Arab armies off its borders. It bivouacked its military in Gaza and the Sinai desert in Egypt, the Golan Heights in Syria, the West Bank and all of Jerusalem.

Israel returned the Sinai to Egypt in a peace deal and in 2005 withdrew from Gaza all of its troops and citizens who had moved into the territory. Jordan decided to withdraw any claim to the West Bank and Egypt did the same with Gaza.

The Arabs left in these lands have been left effectively stateless despite the U.N. vote granting the Palestinian Authority non-member status.

In the past three-and-a-half decades, Israeli governments approved the creation of Jewish towns or "settlements" in the West Bank on the theory that it was meant to have it or may need it to protect itself from an Arab population that refused to make peace.

Some settlements were built along the Israeli border and some several miles from it. To this day, the Israeli military polices roadways and maintains checkpoints in the West Bank to prevent terrorism while granting the Palestinians more power over their day-to-day affairs. At the same time, it made East and West Jerusalem its capital over objections from Palestinians, granting non-Jews living in the city a right of Israeli citizenship.

Sides at an impasse

"The rate of Israeli settlement expansion has left it geographically and politically impossible to have a viable independent and contiguous Palestinian state," Munayyer said.

Nowhere is that more true than with E1, he says. He says the E1 plans would frustrate Palestinian desire for "a shared Jerusalem," in which the Palestinians would make East Jerusalem their capital. It would also make it difficult for Palestinians to travel north and south, because E1 bulges across the narrowest portion of the hoped-for Palestinian state.

Michael Rubin, an analyst at the hawkish American Enterprise Institute, said the Palestinians will not be blocked from their own state by E1. After all, Israel is just as small at its narrowest point, and Israelis routinely travel around the bulge of the Palestinian West Bank to go from north to south.

"No matter what the solution is, you're going to have crisscrossing tunnels and non-intersecting highways," Rubin said. "That's the reality of nation states in the 21st century."

Netanyahu said that Israel must make its largest West Bank settlements part of Israel proper and that he will swap vacant land to make up for it. Even his Israeli opponents concede it is not conceivable that Israel would uproot and relocate 350,000 Jews in cities in East Jerusalem and the West Bank, as some Palestinian leaders have demanded be done.

Munayyer said tunnels and bridges won't bring independence because Palestinians would still be at the mercy of Israel, which could shut down the thruways if it wished.

"How can a state be independent and contiguous if it depends on another state for its contiguity?" Munayyer asked.

Danny Danon, deputy speaker in the Israeli parliament, who opposes a Palestinian state in the West Bank, agrees that if one is created, Israel would be able to step in and halt freedom of movement for "security concerns."

When Jordan ruled the West Bank from 1948 to 1967 it prevented Jews from visiting the Temple Mount and the Western Wall, a remnant of the wall that surrounded the courtyard of the temple. It destroyed dozens of synagogues, and threatened Israel's very survival. That cannot happen again, Inbar said.

"Unless Jerusalem is linked to Ma'aleh Adumin, and Maaleh Adumim to the Jordan Valley, the country will not have a defensible border," Inbar said.

Israel tried exchanging land for peace with Gaza, and since 2007 Hamas has launched more than 12,000 rockets into Israel from the territory in its stated goal to wipe out the Jewish state.

Were Israel to withdraw its settlements from the West Bank, Netanyahu said, "the result, of course, will be a Gaza on the outskirts" of Israel's major Israeli cities.

Not all Israelis see it that way. Hagit Ofran, who monitors Israeli settlements for Peace Now, an organization that promotes territorial compromise, said E1 is meant to prevent a Palestinian state.

"It will not be possible to create a Palestinian corridor from the north to the south," Ofran said.

Back in Beit Safafa, a cold rain was falling outside the market of Talal Salman.